India’s top cities to allocate huge amounts of space to DCs

Hyderabad: Presently, data centres occupy 7.5 mn sq ft space in top eight cities and more than 10 mn sq ft new space to be added over the next 2-3 years. Adani, Hiranandani Group, Salarpuria Sattva have massive investment plans for building data centres in India. Additionally, the government's efforts to make data localisation mandatory ensures promising future for data centres in India.

Shobhit Agarwal, MD & CEO, Anarock Capital says, "Immediately after India went into a lockdown mode due to COVID-19, there was a 25-35 per cent increase in data centre capacity usage as companies began to overhaul their digital infrastructure to deal with the new work environment."

"Work-from-home (WFH) compulsions, online education, video-based medical consultations, a huge increase in e-commerce and business-related video conferencing and webinars are increasing the demand for data centres. Furthermore, the government's move to make data localisation mandatory ensures a promising future for data centres in the country," he added.

As per industry estimates, the data centre outsourcing market in India is worth more than $2 bn and is projected to grow at 25 per cent CAGR to reach $5 bn by FY 2023-24. In fact, data centres are emerging as an alternative real estate asset class with huge potential, and leading real estate developers are zeroing in on this opportunity to reap superior returns from early investments.

The future growth of various industries relies heavily on digitisation and a seamless transformation into Digital India is only possible with the creation of more data centres.

Until a few years ago, only a handful of data centre operators such as NTT-Netmagic, CtrlS and STT GDC operated in this space. There has been a massive shift in perception now. Developers and investors are looking for new opportunities to diversify from the traditional business of residential, commercial and retail assets. Enabled by India's rapid transformation into a digital nation, data centres are set to become one of the most promising sunrise sectors heading for a rapid boom – powered by high growth rates and plentiful venture capital funding.